CLIMATE FINANCE REMAINS AT THE CENTRE OF THE AGENDA AT THE JUNE CLIMATE MEETING

The undisputed star of COP29, climate finance has already become one of the most discussed topics at the interim negotiations leading up to COP30, against all expectations. With the approval of the New Collective Quantified Goal (NCQG) at COP29 in Baku, it was imagined that negotiations in Bonn would resume the interrupted discussions and focus on the Baku to Belém Roadmap, the path that should lead to the goal being achieved by 2035.

However, the Like-Minded Developing Countries (LMDC) group did not agree, changing the game by proposing to include a point on the application of Article 9.1 of the Paris Agreement on the agenda. According to these countries, the article, which sets out the obligations of developed countries to assist developing countries with financial resources for mitigation and adaptation, has never really been implemented in the ten years since Paris. They therefore asked for discussions to begin.

The idea behind the proposal may have stemmed from the very structure of the NCQG. The goal is to mobilise, with developed countries in the leading role, at least 300 billion per year by 2035 towards developing countries. The goal is part of a broader call for all actors to increase climate finance to developing countries to at least 1.3 trillion per year by 2035.

The agreement does not mention Article 9.1 and does not define a specific target for finance provided by developed countries to developing countries. This omission was attributed to a negotiating victory by developed countries, but it probably conceals a greater significance. As we reported from COP29, there were essentially two opposing views on the issue of NCQG:

• developing countries were calling for a significant percentage of public finance to be set as the goal (at the start of the negotiations, the entire 1.3 trillion per year was requested from public finance, while towards the end of the negotiations, the figure had fallen to 440-900 billion from public finance out of a total of 1.3 trillion mobilised);
• developed countries spoke of the need to broaden the taxpayer base to all possible sources and proposed a definition of the goal that was very close to what was eventually agreed at COP29.

According to the Like-Minded Developing Countries, therefore, the new NCQG does not comply with Article 9.1 of the Paris Agreement, but instead focuses too much on the role that private finance could play in climate action in developing countries. However, this view does not take sufficient account of the current investment barriers that prevent ambitious climate action. Furthermore, it does not carefully consider the fact that the private sector is not a party to the Paris Agreement or the UN Climate Convention – and therefore cannot be held responsible for providing the funding defined for developing countries. Increasing concessional or highly concessional public financial resources would instead be essential to overcome these limitations and ensure adequate resources for developing countries.

The considerations presented are based on concrete concerns. So far, private sources have only accounted for a limited share of climate finance to developing countries, and many measures will be needed to ensure that they cover half of the 1.3 trillion estimated by the High Level Expert on Climate Finance. The Road to Belem for 1.3 T and the circle of finance ministers established by the COP30 presidency were designed precisely to help increase financial flows to developing countries. We will see if they succeed in their intent.

In Bonn, after almost two days of intense negotiations between the Parties, the agenda was approved at 5:30 p.m. on Tuesday, without including the item on the application of Article 9.1. The compromise reached concerns the conduct of intensive negotiations on the subject during these negotiations by the two technical bodies that accompany and prepare the COPs each year, SBI and SBSTA. The results will be reported to COP30 in Belém to decide how to proceed.
The interventions of developing countries during the plenary session showed that they have a strong interest in keeping the discussion alive regarding the financial obligations of developed countries. It is not excluded that the implementation of 9.1 of the Paris Agreement will appear on the Belém agenda.

Article by Claudia Concaro, Italian Climate Network delegate to the Bonn SB62 negotiations.

Cover image: UNFCCC photo.